Metal Recovery Initiatives
Since the commissioning of the Phase II expansion late in 2011, considerable progress has been made in improving copper and molybdenum recoveries, to the point they now exceed design parameters. During the first quarter of 2013, recoveries for copper and molybdenum were 82.5% and 82.3%, respectively, compared to 72.6% and 70.9% in the first quarter of 2012, and design parameters of 80% and 75% for copper and molybdenum, respectively.
With the improved safety culture arising from the "Safe Production" program implemented a year ago at Mineral Park, year-over-year safety incident rates, as measured by total reportable incident rates ("TRIR") have decreased significantly to rates that are now below those for comparable open pit mines in Arizona, while employee turnover has decreased by 10% over the same period.
Cost Reduction Initiatives
Cost reduction initiatives continue to be implemented throughout the organization with reduced costs at the operations and reduced spending on administration. Comparing 2011 to 2012, onsite costs (on a per ton milled basis) have been lowered by 7% from $11.04 per ton milled in 2011 to $10.29 in 2012. The Company's goal is to further reduce onsite costs below $10.00 per ton. Administrative cost efficiency initiatives have reduced administrative expenses from $2.3 million in the first quarter of 2012 to $1.4 million in the fourth quarter of 2012.
A detailed review of the exploration potential at Mineral Park has outlined three areas within the current life-of-mine pit design that have the potential, with further exploration work, to add to the Mineral Park mineral resource base. All three areas have intersected near surface copper and molybdenum values over mineable widths that have the potential, with an additional exploration work program, to optimize Mineral Park's mineral reserve and mineral resource estimates. In addition, two areas immediately adjacent to the current life-of-mine pit design contain near surface copper mineralization. The Company will continue to compile this data with next steps, including a potential drilling program, to be determined.
First Quarter 2013 Operating Results
Production for the three month period ended March 31, 2013, totalled 20.4 million pounds of copper equivalent(i), comprised of 8.3 million pounds of copper in concentrates, 0.8 million pounds of cathode copper, 2.4 million pounds of molybdenum and 152.1 thousand ounces of silver.
Production (1) Q1 2013---------------------------------------------------------------------------- Copper in concentrate (million lbs) 8.3 Cathode Copper (million lbs) 0.8 -------------------- Total Copper (million lbs) 9.1 Molybdenum in concentrate (million lbs) 2.4 Silver (000 oz) 152.1 Copper equivalent(i) (million lbs) 20.4Mine (millions) Total tons mined 7.2 Ore tons mined 3.8 Leach tons mined 0.4 Low grade tons mined 0.8 Waste tons mined 2.0Mill Tons processed (million) 3.8 Tons processed per day 42,738 Copper grade (%) 0.13 Molybdenum grade (%) 0.038 Silver grade (oz/t) 0.10Recoveries (%) Copper 82.5 Molybdenum 82.3 Silver 41.4Concentrates (1) Copper concentrates (dry tons) 21,004 Copper (%) 19.6 Silver (oz/t) 7.24 Molybdenum concentrates (million dry lbs) 5.3 Molybdenum (%) 46.3(1) Adjustments based on final settlements will be made in future periods.